Raymond James Agrees To Pay $150 Mln To Settle Alleged Fraudulent Visa Program

(RTTNews) - Raymond James Financial Inc. (RJF) said that it has reached an agreement to settle all investor claims against the firm related to the previously disclosed Jay Peak EB-5 visa matter, subject to the court's review and approval, and other customary conditions.

The $150 million settlement relates to an alleged fraudulent EB-5 investment program created in 2007 by third parties and offered directly to foreign investors. EB-5 is a U.S. government visa program through which foreign investors and their immediate families can obtain permanent residency green cards by making a capital investment in a U.S. business.

Raymond James did not act as placement agent or in any other capacity for the program and none of the investors in the program purchased their investments through Raymond James. A Raymond James financial advisor for the brokerage accounts of the related investment partnerships is no longer employed by the firm.

The firm's supervision program has undergone significant enhancements for a number of years now, including considerable investment in its anti-money laundering (AML) control infrastructure including a substantial increase in AML associates, hiring a new chief AML officer with extensive experience, expanded training for all associates, and the integration of Mantas, a state-of-the-art transaction monitoring solution, to better detect suspicious activity.

As of December 31, 2016, the company had accrued $50 million related to this matter. The settlement provides the firm with the right to share in proceeds of certain third party recoveries that may be obtained by or on behalf of the SEC-appointed receiver or the receivership entities.